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3 1. What are E-Checks? Checks, sans paper eChecks work just like paper checks Same legal treatment as paper checks An all-electronic, end-to-end payment instrument Digitally signed promises to pay Signatures on echeck, endorsed when deposited Support for multiple signatures Bank payments, safe enough for the Internet Inherit sound practices for processing checks Add strong public key cryptography

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4 Deliver clear benefits for all parties (faster, lower costs, fewer errors) Support multiple business models Leverage current banking system Blend current business practices with the latest technologies and the Internet Serve business and consumer interests (half of all paper checks are business-to-business) Facilitate commerce in general… …including ecommerce! 2. Why E-Checks?

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5 3. Differences Comparison of Electronic Payments by Virtual and by SET CharacteristicsVirtual CheckSET Payment model reproduced Paper-based checks Bank cards (credit and debit) Interaction with the user E-mail, Web Web AuthenticationOffline Online Authorization of the payer Sent jointly with the payment instructions Preauthorization at subscription time Trusted third partyNot availableMandatory Data on the payer's account Available to the merchant Hidden from the merchant